Category Archives: Entrepreneurship

You knew that Nassim Nicholas Taleb’s Antifragile was in my reading list: having read it, I now owe you a review. Taleb’s The Black Swan was a book I found not only clever and innovative, but engaging and somehow necessary (for reference, here is my 2007 Black Swan review); Antifragile, rather less so.

What is antifragile? Taleb has coined the neologism to describe a class of things that “benefit from shocks”: “thrive and grow when exposed to volatility, randomness, disorder, and stressors and love adventure, risk, and uncertainty.” “Antifragility is beyond resilience or robustness. The resilient resists shocks and stays the same; the antifragile gets better.” It is a property of living beings that Taleb describes in mathematical form (convexity) and proceeds to apply to ideas, cultures, political systems and much more. He is least interested in the application of the idea to the “vulgar” world of finance, perhaps feeling that the events of the past few years have abundantly proved his point.

Notwithstanding the author’s ambition, scope and breadth of intellectual interests, let me say right away that this would be a bigger book if it didn’t hit the reader in the face repeatedly with bitterness, sarcasm and contempt. The deeply held opinions of the author may not have changed since his previous books; his tone, I think, has – and not in favor of readability. Just witness the ad personam taunting and teasing directed at certain people (Thomas Friedman, Paul Krugman, Joseph Stiglitz, Robert Merton) and schools (“The Soviet-Harvard delusion”); the author’s scorn for entire professions, such as academia and management; his rants against large corporations, with the exception of Apple (!), and disdain of corporate leaders, except for Steve Jobs. Passages like this may be occasionally entertaining to the reader, but grow to be too much:

The historian Niall Ferguson and I once debated the chairperson of Pepsi-Cola as part of an event at the New York Public Library […] Neither Niall nor I cared about who she was (I did not even bother to know her name). […] My experience of company executives, as evidenced by their appetite for spending thousands of hours in dull meetings or reading bad memos, is that they cannot possibly be remarkably bright. […] Someone intelligent—or free—would likely implode under such a regimen.

The most convincing arguments in the book are about medicine and diet. Which is somewhat surprising from a non-specialist writer, until you remember that most medical and nutrition professionals have a bias for intervention (medicate, perform surgery, keep you on a diet, sell you supplements), when subtraction (not intervening and removing things instead) would often just work as well. They therefore live an implicit conflict of interest, the paradoxical result of which is “if you want to accelerate someone’s death, give him a personal doctor”. Taleb is right to call the reader’s attention to iatrogenics, the (usually hidden or delayed) damage from treatment in excess of the benefits. His ideas on diet also make sense: our bodies benefit not just from variety of nutrients, but from some “randomness in food delivery and composition” and some stress in the form of periodic deprivations (such as in the Orthodox lent) and occasional fasting. Even here, though, the author’s Levantine superiority complex (and don’t you forget that Steve Jobs’s ancestors came from Syria!) gets to be rather quirky:

I, for my part, resist eating fruits not found in the ancient Eastern Mediterranean (I use “I” here in order to show that I am not narrowly generalizing to the rest of humanity). I avoid any fruit that does not have an ancient Greek or Hebrew name, such as mangoes, papayas, even oranges. Oranges seem to be the postmedieval equivalent of candy; they did not exist in the ancient Mediterranean. […] As to liquid, my rule is drink no liquid that is not at least a thousand years old—so its fitness has been tested. I drink just wine, water, and coffee.

His brief critique of Singularity efforts follows logically from his arguments, but is delivered with the recurring scornful attitude. Well, at least he remembers the fellow’s name:

I felt some deep disgust—as would any ancient—at the efforts of the “singularity” thinkers (such as Ray Kurzweil) who believe in humans’ potential to live forever. Note that if I had to find the anti-me, the person with diametrically opposite ideas and lifestyle on the planet, it would be that Ray Kurzweil fellow. […] While I propose removing offensive elements from people’s diets (and lives), he works by adding, popping close to two hundred pills daily. Beyond that, these attempts at immortality leave me with deep moral revulsion.

The least convincing arguments in the book are those in praise of entire economic systems based on “small is beautiful” (going hand in hand with the author’s love for the Swiss political system). Taleb rightly praises small entrepreneurs for their risk-taking: even if small businesses are individually fragile (as in the example of restaurants) or merely robust, even harboring a bit of antifragility (taxi drivers), their ecosystem (the restaurant scene) becomes antifragile. And he is right to point out that size can make you fragile: it is probably true that large projects are intrinsically over time and over budget due to intrinsic negative convexity, and that “the problem of cost overruns and delays is much more acute in the presence of information technologies”. Yet, one cannot seriously propose the London Crystal Palace (an overgrown conservatory built in 1850-51) as a model of architectural effectiveness, let alone human achievement, today.

It seems to me that in deliberately ignoring that it is mostly large organizations that create large economic surpluses, Taleb gets way too close to the current “degrowth” narrative, a crackpot economic proposition if there ever was one. While he openly despises large corporations and the people who work in them, he seems happy to write up his books on a computer built in a very large factory in China (as long as it is a subcontractor for Apple), to have his writings published by very large publishing houses, and to fly in planes built by large corporations and run by other large corporations (even while pointing out the fragility of air traffic control systems), for example to meet interesting people in Davos, at a large annual World Economic Forum gathering that would not exist if there were no very large corporations to sponsor it. Even the aforementioned New York Public Library is probably a much too large and bureaucratic organization for his taste, given that his model for an antifragile life and thinking is the “flâneur with a large private library”, no doubt acquired via independent (often antiquarian) booksellers.

With the exception of, say, drug dealers, small companies and artisans tend to sell us healthy products, ones that seem naturally and spontaneously needed; larger ones— including pharmaceutical giants— are likely to be in the business of producing wholesale iatrogenics, taking our money, and then, to add insult to injury, hijacking the state thanks to their army of lobbyists. Further, anything that requires marketing appears to carry such side effects. […] There is no product that I particularly like that I have discovered through advertising and marketing: cheeses, wine, meats, eggs, tomatoes, basil leaves, apples, restaurants, barbers, art, books, hotels, shoes, shirts, eyeglasses, pants (my father and I have used three generations of Armenian tailors in Beirut), olives, olive oil, etc.

Eyeglasses? Last time I checked mine, Luxottica had made those – and Luxottica is a very large multinational that has long abandoned its “small is beautiful” stage. Maybe Mr. Taleb orders his glasses from Warby Parker – fine. But do Warby Parker’s owners really not want to grow it into a much larger company? And does Mr. Taleb like a glass of vintage Chateau d’Yquem less than a Greek retsina, knowing that Chateau d’Yquem is owned by LVMH, a large corporation, and not a small artisan?

In summary, Antifragile is a thoughtful book with much to recommend it for, and you should read it if you like the author’s broad, non-academic erudition, share his reverence for ancient history and Mother Nature, and don’t mind his personal quirks too much; but the book’s flaws in tone of voice – and, sometimes, in argumentation – make it less strong than it otherwise could have been.

Months ago, I had words of praise for a then-Minister in the French government, Eric Besson, for convening a start-up evening following an official government conference at Bercy, “Nouveau Monde 2.0″.

Today was better: Italy’s Minister for Economic Development, Corrado Passera (pictured here with rockstar entrepreneur Renzo Rosso, from Rosso’s own Instagram feed) sat outdoor in his shirtsleeves at the H-Farm campus, listening and taking notes for about three hours in a town hall meeting with entrepreneurs, investors, people from accelerators and incubators, and a good cross-section of the digital start-up scene in Italy (I was there with some of my co-investors at Italian Angels for Growth).

The contrast with Passera’s predecessors in style and interaction mode was striking. It was a winning idea to convene the event – or to accept the invitation by the Italia Startup organization – at Riccardo Donadon’s incubator, far from Rome. It felt – perhaps especially now that the Monti government’s honeymoon is over, and that Monti’s ministers need as much goodwill as they can get – like a breath of fresh air. There were startuppers from all over Italy, a lot them young.

But events and happenings alone do not change the world. Laws do. Before the summer is over, we should have a so-called “Digital Agenda package”, following an unusually wide-ranging public consultation. We’re out of time for inventing new institutional mechanisms, Passera said: let’s just copy what has worked elsewhere. Examples were brought out in droves on topics ranging from teaching kids about entrepreneurship in the US, to the UK’s Enterprise Investment Scheme offering tax relief to angel investors, to the Chilean government’s program to attract early-stage entrepreneurs from abroad.

There is a different buzz in Italy these days. Expectations are high, and this government doesn’t have a whole lot of time. Mr. Passera, do not disappoint the people you saw today.

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There are business angels in Europe: they are less visible than the Silicon Valley super-angels, but they do invest in early-stage enterprises, they work to make the business environment more open to entrepreneurs, and they believe in the power of entrepreneurship to add dynamism to our tired economies.

I have known Francesco for a few years, not just in my role as a mini-angel and member of Italian Angels for Growth, but also as a family friend. He prefers to keep out of the limelight. But in wine connoisseurs’ circles, he is best known for returning to Christie’s a bottle of 1784 Château d’Yquem, which they had mistakenly shipped to Francesco, instead of the 1904 he had bought: still a fantastic vintage, but not as phenomenally rare as the 1784, which may or may not have been a legendary “Jefferson bottle“.

Congratulations, Francesco! I hear you opened the 1904 with some friends a few years ago, but I am sure your cellar offered a choice of other worthwhile bottles to celebrate the EBAN award in style.

Ever since I first heard of the global nonprofit Endeavor, an outfit dedicated to mentoring and empowering entrepreneurs in emerging countries, a few years ago (former colleague Matt Bannick sits on Endeavor’s board), I’ve thought: why, we need this thing to come to Italy. “It’s venture capital without the capital,” as founder Linda Rottenberg says, in this profile in the Wall Street Journal Magazine. (“Rottenberg […] had made her way to Latin America in the mid-1990s. Her eureka moment came in Buenos Aires. Riding in a taxi cab with a driver who had a Ph.D. in engineering, she asked why he wasn’t an entrepreneur—back home, engineers were starting dotcoms. He reacted with a quizzical look: “A what?””)

Don’t get me wrong: entrepreneurs need capital, too. But first of all they need to live in an environment that understands, appreciates and supports the culture of entrepreneurship. Not the mom-and-pop entrepreneurship of opening a bar or buying a taxi license: but the type of work that, through process or management or technological innovation (it doesn’t have to be technology, although that helps), creates a scalable business where there was none before, and therefore creates value for customers, lifts people out of unemployment, and contributes to growth.

So, here is my proposal: dear Endeavor team, please come to Italy. We’re not that different from the Latin American countries where your work has been so impactful.

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There is a megatrend on the Web today, and it’s called personalization. I didn’t say a “new” trend: Amazon, after all, has provided you with remarkably accurate personalized product recommendations for years. But it’s a bigger trend today now that more crunching power is cheaply available, more and more of our preferences and behaviors become susceptible to reasonable approximations by algorithm, and more smart entrepreneurs move to take advantage of it.

My quick scan of the TechCrunch headlines today provided, at a glance, three examples of hyper-personalization (links point to the TC articles, by three different writers – what a story if an editor had thought about weaving them together!):

My6Sense, an RSS content filtering tool that resulted in an “a-ha moment” for the reviewer when absolutely relevant posts floated to the top of his iPhone screen, without the user having had to do anything else (no ratings, no preferences) than using the app as a reader for a couple of days.

BeeTV, a personal TV recommendation system from the brains of Gavin Potter, of Netflix Prize competition fame;

This trend will brilliantly simplify our lives if it helps us save time that we waste today. If you don’t like browsing through clothes, surfing through channels, scanning your RSS feed reader, flipping through bookshelves, reading movie reviews, turning the pages in a recipe book, choosing a toy for your nephew, researching holiday destinations and so on, then recommendation algorithms will solve the problem for you: voilà, you don’t know it yet but this will become your favorite TV show. If you don’t like dating and want to be in a serious relationship from day one, there are matching algorithms that will find you a compatible partner for life. And personalized medicine holds – of course – huge promise.

But we also need mechanisms for serendipitous discovery; for stretching one’s boundaries; for challenging one’s opinions; and for getting out of our comfort zone. (If schooling were organized by personalized preferences, how many people would ever get any basic algebra?) The personalized universe freezes us in time. It narrows our horizons. If not executed with a fondness for adjacencies and the odd curveball, it will let us dig ourselves into a deep tunnel of 1970s progressive rock, if that’s where we start from, and never even discover 1990s grunge. It will keep suggesting backpacker hostels when we can afford four-star hotels, or four-star hotels when we can only afford backpacker hostels. It will make us into Burgundy experts, while we don’t know we might enjoy Bordeauxs better. It will reinforce us in our particular religious and political bias. It will perpetuate our teenage Ayn Rand infatuation.

Social media may come to a partial rescue of the algorithm: you can follow a friend’s recommendation for Industrial music if all you know is Alternative. But you must still have become friends with that person – or “social media friends”, if you’ve never met in person – on the basis of some shared worldview. A social media recommendation mechanism to open up our horizons would refer back to Granovetter’s “strength of weak ties” and perhaps upweigh the tastes and preferences of our weaker connections, so that we may discover and learn something new.

Personalized recommendations are undoubtedly efficient. If you want your life to become more efficient, you will use hyper-personalization to minimize the drudgery and get to a good enough solution quickly. But if at times you enjoy discovery, you like being challenged, you want to try something different – you will step out of your personalized universe and explore someone else’s, or create one that does not exist.

What a lovely and whimsical image to shake off that stodgy bank feeling. And yet, what an arrogantly nonsensical statement they chose to go with it.

Eliminating the “Maybe” in “Maybe I’m right and the world is wrong” means no healthy skepticism. No awareness of what we don’t know. No willingness to learn more. If that’s what you aspire to, we’ve got a bank that’s ready to serve you. In fact, in its desire to foster certainty and eliminate ambiguity, this campaign stands as the polar opposite of the thought-provoking HSBC “Your Point of View” campaign, the one you’ve seen gracing several airport walkways over the last couple of years. In that campaign, who’s right and who’s wrong is about different points of view, and HSBC apparently maintains that celebrating differences is better than eradicating them. Feel free to call its cultural relativism naive and dangerous, but I find it a rather more appealing brand statement than UniCredit’s monolithic erasure of doubt.

More about the UniCredit campaign in the Advertising section of the bank’s site. The print ads show a campaign URL, www.be-free-of-maybe.eu, but that site doesn’t seem to be quite ready yet (as of today the URL merely redirects to the corporate site).

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Business Week recently did some legwork to find the hottest entrepreneurs under 25 in Europe. And the winners are… from Ireland, Bulgaria, the Netherlands, the UK and again the Netherlands (although this last case is a bit more complicated – Thomas Mylonas grew up in Greece and hatched his plans for DotKite design brand while working at Fila in Montebelluna, Italy, before setting up shop in Amsterdam).

None of the five winners come from any of the big three sickly Continental economies – Germany, France or Italy; even Tariq Krim, Netvibes’s founder and a star French entrepreneur, is, at 34, way over the age limit for the contest – 25. (We do have a different concept of youth from the Americans – over here, you can be considered a young writer in your 40s and a young politician in your 50s. Or maybe we just have more gerontocracy?) Even if the German locomotive is accelerating and the French are newly confident about their prospects, the Business Week survey is another symptom of the crucial malaise in the three countries – lack of innovation.

The sixteen finalists among which the five winners were chosen show much the same geographic pattern, with the exception of one native Italian, Michele Finotto, founder of Ruby on Rails developer WonSys (he’s the guy with the biggest smile in the BW slideshow).

Congratulations to Michele for making the list! (Photo courtesy of Business Week). And for next year… Marco P., Michele A., how about submitting some candidates from First Generation Network?